Colm confident in natural gas production prospects

EVEN IF Atlantic’s Train One negotiations aren’t settled, Finance Minister Colm Imbert doesn’t see it as a significant problem, at least in the short term, for TT. In fact, it might actually be better for TT.

Speaking to reporters on Friday, Imbert said the government actually gets better returns from Trains Two, Three and Four. These trains are currently running below maximum capacity (the overall plant including Train One is running at 85 per cent, he said) and gas that would have gone to Train One could be diverted to these other trains, which are newer and more efficient.

Train One is the first and smallest of the trains. And as one of the first LNG plants in the world, its structure was so designed to encourage future development, therefore included incentives, including tax breaks.

Newer trains did not have as many such incentives. Train one consumes just over 490 million standard cubic feet of gas per day, Trains Two and Three, just over 500 mmscf/day, and Train Four, the largest, about 700 mmscf/day. “If you are no longer supplying Train One you will be able to supply the others. So that is more revenue coming back to the state,” Imbert said.

The fate of Train One has come to the fore ever since BPTT announced last week “disappointing results” from its infill drilling programme. Infill drilling is the practice of drilling additional wells within an already producing field. Last month, BPTT drilled wells that were not as successful as anticipated, with one dry well and another producing less than the expected amount. The company said this will have a material impact on its production next year, including the supply to Train One.

The shareholders of Train One, of which Shell is the biggest followed by BPTT, will have to determine how to proceed given this information, but Imbert the news was nothing to be alarmed about.

Any residual gas after supply is met at the other Atlantic trains, should Train One not come on line as anticipated, would be diverted to petrochemical companies, he said. “TT gets more revenue from sale of gas to petrochemical companies than to Atlantic plant. So the whole thing in its totality nothing to be alarmed about… We’ll be fine. I am certain all gas we produce can be utilised.”

Imbert said according to information he has received from the Ministry of Energy, TT is still on track to meet its anticipated 3.8 billion standard cubic feet in 2019. For 2020, depending on what BPTT’s review of geological data says, the estimated production will be about 3.7 bcf/day, a drop off of about 100 million standard cubic feet/day. But he was also confident that other producers could pick up the slack and perhaps even ramp up production.

“When you look at it in totality, all the gas producers we do not think it will significantly impact production.”